Large price increases since last sold

[Give0fecks]

I’ve noticed a lot on this forum lately people saying “what did the vendor pay for it when it was last sold” eg buyers on this forum seem to feel they should be paying close to pre Covid prices.

I mean really?! I know it’s area dependant but prices here have shot up by over 40% in the last 5 years and there isn’t a chance in hell they are going any where near back down.

I actually have no agenda as we are trying to upsize so it would be great for me if house prices did reduce, but it’s just not going to happen to any significant extent here.

Even nationally I could see maybe another 5-7% but not back down anywhere near pre Covid levels?

thoughts?

We will see. They shot up 40% on the back of very low interest rates, a stamp duty holiday, and the social changes from the pandemic. Those things have all gone. It’s going to be an interesting year or two.

I agree OP.

I'm in the North, and even we saw a steady and consistent price increase in property that hasn't come close to dropping.

My NDN but one sold her house for 40k more than we bought ours for in 2019. Exactly the same house as ours. Prices are what they are.

Yes I agree @Give0fecks

Prices did get inflated during the stamp duty holiday combined with low interest rates. So I understand we are now seeing a correction, but some people go too far when they expect prices to revert to what they were 5 years ago, for example. It's because certain sections of the media like to be overdramatic with talk of house prices "crashing" because that generates more hits that more moderate language would do. Also, many people like to catatrophise (or can't help themselves from doing so) as we saw during Covid.

I'm neither buying nor selling, got my family home and don't intend to move for many years so not got much of a vested interest in it either. My daugher bought a flat in 2022 and my expectation is that the value of that flat will fall by about 10% by 2024.

I believe prices are expected to start picking up again from 2025 so it looks to me like 2024 could be a reasonably good time to buy once the BOE base rate starts to fall and fixed rates come down to more manageable levels.

It’s location dependant. The north seems to still be rising while the south is dropping, the north will follow later.
I’ve seen places bought in 2020/21 for 30% less than they are marketed today with no changes made to the property. These sellers are jokers and will be lucky to achieve asking price (in the south for now at least)
The prices are reverting and will continue well into next year

And higher interest rates are now here to stay and many people will sadly be having to sell up or default if they can't afford their mortgage. Add to that the inflation and high energy bills.

Property is only worth what someone will pay for it. It's not realistic to think people will now be able to afford or pay these high prices for property.

So a seller can ask for covid inflated prices but doesn't mean they'll get it.

I’ll be interested to see what happens now interest rates have risen. The rungs of the ladder are huge: we wouldn’t be able to upsize from a 3 bed semi to a 4 bed detatched unless we doubled the size our mortgage, not many people could afford to do that even before interest rates rose.

The OBR have produced a forecast on house prices showing a 10% fall from the peak Housing market - Office for Budget Responsibility (obr.uk) Obviously it is an average and a forecast. However they are probably the most impartial of the predictions.

'The north' is a massive area. I'm in the north of the country and prices are falling here. Not crashing, but there is a steady reduction and far more houses available below £200k than I've seen in a few years.

I think nobody gains from this except the banks with higher interest paid on a higher mortgage amount or people whobuy propertyas aninvestment...
You'll always need somewhere to live.

I agree. It’s a seller’s market where I am right now. A house similar sized to mine sold for 750k a few months ago without any renovations. (We bought it for 400k during covid - our house would sell for even more as we have renovated extensively. But even if we sell for 800k we wouldn’t be able to get the house we want in this area without a substantial mortgage. So we’re going to stay put and see what happens.

Yes apologies I meant another 5-7% in addition to the approximately 5% fall that’s already being reported nationally for this year.

@Sublime66 we have the same in our area. Viewed a house last month sold for £525 in dec 21, no changes made, now listed at £700k. But every listing is the same, no one is pricing cheaper.

It's location dependant and often a case of people trying it on. where is your area?

'the south' is also a massive area but in general it is losing value now quickly, where as the north still seems to be gaining some value because it is comparatively more affordable with a mortgage, it makes sense.

The increased interest rates have not yet worked through to the majority of mortgage holders - many people are still on low, low interest rates while in a 2, 5, or 10 year fix. The jobs market is tight - which is pushing up incomes.

Many have not reached the critical point of needing to sell and honestly believe that soon interest rates will fall back.
To me that is a bit of wishful thinking but I never imagined interest rates would stay low for over a decade while house prices climbed to ever ridiculous levels.

Near me - there are still vastly overpriced properties sitting on the market but a notable rash of reductions are appearing which is something not seen for a long time.

I think that interest rates will fall back in 2024 @ruby1957 but not far from their current amount - maybe 4% by the end of 24/early 25.

Certainly nothing like the extraordinary low rates we have seen in the last few years.

Just not my bit of the north! 🤷‍♀️ (And probably others.)

Exactly.

You can't split the country in to two housing markets - "the north" and "the south"

There are hundreds, more likely thousands, of micro-markets where demand will vary and prices will fluctuate differently.

"No one is pricing differently"... But nothing's selling either! Lots of sellers round here (Devon) are merrily listing at 2021 prices. And sitting on the market.

Agree different markets different price increases/decreases.

Last (recent) sold house price is a good indicator of what the market was willing to pay at that point, so unless your local market is very hot or the house has had a lot done to it a vast increase in price over a recent sale price is an indicator of a chancer or flipper who is expecting you to fund their worldwide cruise on the basis of slapping a bit of laminate down and magnolia + big clock on the walls.

Best not to waste your time with them - I see this all the time in my area on RM.

@GasPanic but it’s obviously subjective what a ‘vast increase’ is.

say someone bought in 2017, so 6 years ago. House prices increased by 5% a year, so roughly 30%. Is that acceptable? Just out of interest.

I'm aware there are micro markets all over. I was making a generalisation to make my point regarding variations in activity, area/price dependant.

Cornwall and Devon, the South East and the South West are seeing some of the steepest falls.

100%. You can spot these a mile off. highly likely they won't achieve asking price. in fact I contacted an agent yesterday out of curiosity, southern cathedral city, £750k, last sold 2021 £600k, lick of paint, few new windows.
I questioned the price vs improvements, was asked what I would offer I said "not what they paid for it in todays market"

It isnt that simple
I bought a central London property in 2021 and I have been offered much more than I paid for it several times- got another letter yesterday
I have just agreed to but a property in Yorkshire- went to sealed bids - sold at well over asking within 7 days
Another house I own- used to get regular offers for it but haven had any for a while and so I suggest that the market may be cooler there
Looking in a holiday hotspot- lots of holiday cottages coming on but all at pretty decent prices and all but 1 now sold

Location, location, location I think

@Sublime66 you’re saying you wouldn’t pay 2021 prices?

im only asking questions as I’m curious. My local area market is very different, a little bubble and unfortunately prices aren’t falling.

I do think prices will reduce eventually everywhere, but some less than others. Of course there will be the odd place which will buck the trend.

If I was looking to buy now, I would try to avoid locations that aren't seeing reductions or be prepared to wait. The upcoming year is likely to intensify market instability.

I would buy at 2021 prices if my LTV was low-ish and if I was quite certain my job industry was secure.